Apparently concerned over the continued slide in the value of the nation’s currency, the Senate Wednesday passed a resolution summoning the Central Bank of Nigeria (CBN) Governor, Godwin Emefiele, to appear before it on the depreciation of the Naira and its implications on the economy.
The resolution to summon Emefiele followed the adoption of a twopronged motion urging the lawmakers to invite the apex bank to brief it on the depreciation of the Naira which took a worsening dimension in the past three weeks during which the local currency fell to an all-time high of N245 to a US Dollar.
The motion, which was moved by Senator Nazif Suleiman (APC Bauchi North), also urged the lawmakers to charge the Federal Government to intensify efforts towards diversifying the nation’s mono-product economy dominated by oil to exploit the potentials in taxation, agriculture, manufacturing, international tourism and solid minerals.
In his motion titled “The state of economy: Naira depreciation and its implications”, Suleiman said: “The state of Nigerian economy as it affects the growing rate of the depreciation of the Naira, is a very serious concern. Naira has depreciated in the last few months at a much faster rate than it had appreciated over the last two years. “The cause of this depreciation is the consequence of the negative cash flow as a result of the downward trend of oil price, which is further worsened by speculations in the foreign exchange markets.
“The banking industry may be currently defaulting in the global economy, and that is sending a bad signal and bad image about the Nigerian economy. This resultant speculation is resulting to a huge capital flight with its attendant inflationary consequences, which will affect an average Nigerian on the street.
“Illicit fund flows and money laundering going through Nigerian financial system contributes in weakling the value of the Naira, which has led to the recent decisions of the CBN to increase its vigilance to ensure that Nigerian banks are not used as conduit for illicit funds flow and money laundering in foreign currencies. “The procedure for processing demand and supply of foreign exchange by the CBN be reviewed and various additional options considered to stem the precipitous depreciation of the Naira, and thereby discouraging speculators,” Suleiman said.
Commending Suleiman for the motion, Senate President, Olusola Saraki, said the Upper Legislative Chamber, and indeed all Nigerians, must contribute in the defence of the Naira against all other currencies. “The naira is being subjected to speculations and the only way to defend it is to know that government policy makers are firm in the defence of the naira.
“It will not be easy because speculators are relentless, but if we give all the support and stay on course, our naira will indeed stabilise. “Nobody would have believed that we could stop the importation of cement; I think we can do that for rice, palm oil, wheat, and other products that we can produce in Nigeria,” he said.
The Naira has suffered a cumulative depreciation of 20 per cent in the official market in the last one year, notwithstanding the intensive effort by the CBN to defend the Naira, a feat that cost $4.7 billion to achieve as at April. Last June, the CBN introduced foreign exchange restrictions that banned 41 items from being imported with foreign exchange sourced from the official, inter-bank or Bureau De Change. The CBN said importers of the affected items should source their forex from other windows, a measure that had led to the worst depreciation level of the Naira in the Parallel Market